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into data packets for transmission over the data network, also known as VoIP. In order to get the voice packets into a data packet, the conversation is broken into shorter conversations that are then placed inside a data packet.

The key to the question is where that packetization starts. With an IP PBX, the phones and phone switch are native IP, meaning the conversation is put into voice packets at the source and then transmitted as a native IP packet to be reassembled at the receiving end. Older non-IP PBX systems expect digital conversations to be transmitted differently or over the plain old telephone service (POTS). All IP PBXs can translate packets for the POTS network where needed, such as for analog fax.

A VoIP gateway breaks down the conversation and stuffs the bits into IP packets at the network edge for transmission over the IP network. The difference is that the old, analog voice network thinks it is going to transmit over the POTS network, but the gateway packetizes the conversation into VoIP digital packets. The advantage of a gateway is that it allows companies to have an upgrade path to VoIP or operate in a mixed environment with the gateway being the "translator."

Wholesale PBX upgrades can be expensive, as can the associated cabling if there are not enough cable pairs for data transmission. Some VoIP phones may require more than two wires for Power over Ethernet-enabled phones. If the data connection at a desk is used and the old voice connection is lacking, then you could use a switch-enabled phone or upgrade to the new standards-based four-pair cabling system.

Depending on whether or not the PBX switch is fully depreciated, a VoIP gateway may be the only choice for areas that want VoIP.

Take for instance a company that has offices in three cities. City A is the main city with a standard PBX, while cities B and C are smaller, newer locations and the desired method of communication is VoIP. A VoIP gateway would reside at the edge of City A and translate the packets back and forth to cities B and C. Communications from City B to City C would not need a gateway and they could communicate with each other natively through their VoIP switches.

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